Published on:

SENATE BILL 113: HELPING TO PREVENT DEFAULT, ONE LAWSUIT AT A TIME

Posted by Christina Cribbs
Welcome to every defense attorney’s worst nightmare: Your client, a restaurant or retail business, is being sued by a former customer. The lawsuit is delivered to the business by a local Sheriff or a special process server who hands the lawsuit to the first person he sees when he walks in the door, the cashier. The cashier is unfamiliar with the ligation process, is very busy handling customers, and forgets about the “paperwork” she received. The lawsuit ends up in a pile somewhere, or maybe even the trash, and never makes it to the home office or to the insurance company. We all know where this is leading; straight to default. Your client does not answer on time and must face the consequences, which could be significant.

Thanks to Senate Bill 113, which made important and beneficial changes to O.C.G.A. § 9-11-4(e), a lawsuit can no longer be properly served on a cashier, secretary or “other agent” of a corporation. The change became effective on July 1, 2013. Under the new version of the statute, service of a corporation is proper on the president, officer, managing agent, or registered agent of a corporation. The updated statute also provides a definition for “managing agent.” O.C.G.A. § 9-11-4(e)(2)(B). If not complied with, the changes to O.C.G.A. § 9-11-4(e) could certainly provide a corporation with grounds for challenging the sufficiency of service.

Because the statute now requires that corporations are served through individuals with some official or management role in the corporation, it will reduce – but not entirely eliminate – the likelihood that the nightmarish situation described above will occur. Of course, the president of the corporation may still lose the lawsuit on her desk.

Posted in:
Published on:
Updated:

Comments are closed.